SONA and the property market

13 February 2020, Thursday

The State of The Nation will have a massive impact on the sentiments going forward for the rest of the year for the general public, industries across the board, as well as with investor confidence.

“Following last years’ State of the Nation speech, it was clear that President Cyril Ramaphosa had set out to increase investment into South Africa, with the introduction of the R100 billion infrastructure fund for the next decade. This fund would go towards the building and operation of key infrastructures, such as schools, railways and roads,” says Stefan Botha, Rainmaker Marketing Director.

“We, as a property marketing company, see investment and property development linked very closely together. Real estate was one of the top biggest contributors to the GDP in 2019 and plays a significant role in attracting investment into South Africa. In order for investment to flow into the property market fluidly, it is imperative that the State of The Nation is used to clarify strategic actions, as well as outline positive policies on key issues South Africa is experiencing,” says Botha.

The trouble with Eskom, the uncertainty behind land expropriation and the need to eradicate corruption are just a few challenges influencing South African investors. These challenges sway investors and guide their decision on whether their monies stay in the country or invest offshore. Similarly, these factors influence foreign investment into the country.

While the country is currently experiencing load shedding; the public, especially private business owners, will want to know what real actions are set out to combat these problems; plans that go beyond another bailout of a state-owned enterprise.

“In recent news, the government is said to be looking at self-generation, especially through renewable energy. Our property development partners are increasingly looking at creating neighbourhoods and estates that are self-sustainable; through the use of renewable energy, rainwater harvesting, and organic farming. Sustainable lifestyles will pave the way and play a part in overcoming our energy crisis,” shares Botha.

Land expropriation has been a hot topic over the years and a major concern for property owners and developers. There has been a lot of news circulated regarding this change and it has fed the general uncertainty of this movement. The State of the Nation speech will need to reassure South Africans, as well as investors across the board, by addressing this bill, outlining the calculated plans and providing a better understanding of who and what will be affected.

“It is evident, that despite these uncertainties, property developers continue to invest in key nodes across South Africa and are working to create new-age estate opportunities that are redefining the property market and promoting a new era of inclusionary living, where individuals of various cultures, demographics, ages and lifestyles will live blended together. Developers are also adjusting their products to open the market up to first-time buyers, and further encouraging investor interest,” explains Botha.

Crime and corruption will continue to negatively impact the economy and as a result will have a domino effect on the rise of negative attributes such as unemployment, poverty as well as the fall of state-owned entities and leading businesses in the country. “It’s these primary concerns that lead to lack of investor confidence and pushes the wealthy South Africans across to foreign borders. Change isn’t going to happen overnight, but we do need to have clarity on the government’s plans to eradicate these issues,” shares Botha.

“Despite the challenges South Africans face with a tough economic climate, the property market is still seeing key areas rise above adverse predictions. South Africa is changing, and we are seeing property developers assist in this change as they introduce smart lifestyles for all, improve infrastructures and roadways, create estates that uplift communities and upgrade areas. Government has an opportunity to gain use the State of the Nation to highlight the positives and provide key insight into actions they plan on taking to turn South Africa around,” ends Botha.

https://www.iol.co.za/business-report/economy/state-of-the-nation-address-to-trigger-the-property-market-42658929

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